Sukuk instrumental in helping society at large

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KUALA LUMPUR: Sukuk, can be instrumental in helping society at large, and in line with promoting the idea of financial inclusion, said Deputy Finance Minister Datuk Amiruddin Hamzah.

He said sukuk should be promoted as a financial instrument not only to facilitate the fundraising exercise of corporations for commercial reasons, but also charitable causes.

“Companies need to address sustainability issues, that is to accentuate the shared clarity purpose.

“Emphasising ‘purpose’ rather than profit alone, generates business confidence, drives investments and creates long-term success,” he said in his speech at the Second International Kuala Lumpur Sukuk Conference.

Amiruddin said with the ever changing sukuk landscape, one must keep pace with the latest trends in sukuk issuance, especially with regards to sustainable and socially responsible investments.

He also highlighted the use of block chain technology as proven use cases and smart technology which has thus far brought to the world a more transparent system.

“On top of the security feature, which is safe from hacking and manipulation, block chain technology serves to eliminate certain bad practices in the market, since it was based on open distributed ledgers,” he said.

He also said as with everything new, the world needs to see and appreciate the function of role models, citing the World Bank’s recently launched bond-i, a block chain- operated new debt instrument.

The two-year bond which raised A$110 million, marked the first time that investors supported a bond that was world’s first to be created, allocated, transferred and managed throughout its life cycle using distributed ledger technology.

Amiruddin said he was eager to see how fast the sukuk market could tap into block chain technology to manage sukuk issuances, covering its complete life cycle, while expressing confidence that this would become a reality one day. — Bernama